The Fed was no help for the bulls as the zombies have no idea on what to do about its current quantitative easing (QE) program or when they will do anything as Wednesday's gibberish fueled the bears to push new lows. It looks and feels like the Fed heads are on the Titanic and headed for disaster while the market continues to deal with the Hindenburg Omen and Fibonacci Retracement levels.
The Dow dropped 105 points, or 0.7%, to finish at 14,897 on Wednesday. The blue-chips traded down to 14,880 ahead of the Fed minutes but rebounded and touched 15,019 (+17) before ending near its low for the session. The next wave of support lies at 14,800 and will likely be tested on further weakness. If this level cracks, the bears could push 14,600 in a hurry. The bulls will focus on clearing 15,000 that has suddenly become near-term resistance.
The S&P 500 fell 9 points, or 0.6%, to settle at 1,642. The index touched a low of 1,630 before bouncing back to kiss 1,656 then fading. Resistance at 1,665 was never really threatened and the lows keep 1,625-1,600 in play. It was the second-straight close below for the 50-day MA for the S&P 500 and the finish back below 1,650 was bearish.
The Nasdaq slipped 13 points, or 0.4%, to close at 3,599. Tech showed some strength in the morning and was holding 3,600 before the whipsaw action into the bell. The index reached 3,630 late in the day but once again failed to hold resistance at 3,625. The finish below 3,600 keeps 3,550-3,500 on the bears map.
The Russell 2000 gave back 7 points, or 0.7%, to end at 1,021. The small-caps tested the 1,018 level twice before making a run to 1,030. Resistance is at 1,040 but seemed like a mile away to the bulls. The bears are still trying to push the 1,000 level and we mentioned a dip or close below 1,013 should do it.
The S&P 500 Volatility Index ($VIX, 15.94, up 1.03) reached a peak of 16.56 and we have been warning once 15 cleared this level could be tested. If breached, the VIX could trigger 20.
As we head to press, futures look like this: Dow (+55); S&P 500 (+7); Nasdaq 100 (+20).